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1 Multimedia in Kurt the Home, Scherf, August 23, Vice 2001 President of Research
2 The Roadmap for the Networked Home Kurt Scherf Vice President of Research
3
4 The Perception of Complication: Case-In-Point: Programmable Thermostats Perecent of Households with Prog. Thermostat (%) 80% 60% 40% 20% 0% U.S. Households Reporting Actual Use of a Programmable Thermostat, by Level of Education of Respondent (n=681, U.S. Households with Programmable Thermostats) Some High School 23% High School Graduate 49% Some College/Associate D... 55% Four-Year College Degree 63% Some Graduate School Highest Level of Education Completed 68% Graduate Degree 64% Source : Bundled Services and Residential Gateways, a survey of 2,500 U.S. households in July 2001
5 Key Drivers for Home Networking 1. High-speed Internet Access 2. Consumers will not network for the sake of networking, and for this reason, media offers the compelling solution that can facilitate networking for the sake of entertainment. - Brad Bester, Director of Product Management, D-Link Systems Inc. Entertainment is the vehicle for home network adoption. - John Durham, Product Marketing Manager, SONICblue Inc. The company that succeeds in the home networking market will offer compelling solutions relevant to the lifestyles of all family members including audio and video entertainment. - Julie Walker, Product Line Manager 3Com Residential Connectivity Group
6 High-End Entertainment Households: Entertainment Via the Internet/PC Use of the Internet for Entertainment/Information-Related Purposes: High-End Entertainment Households Entertainment (Daily or Weekly Basis) Information (Daily or Weekly Basis) Online Gaming 37% Check Local Weather 62% Download/Listen to Music Files 23% Sports-Related Information 41% Listen to Internet Radio 17% Check Movie Listings 13% Download/Watch Online Video 10% Check Club/League Schedules 10% Check School Schedules/Activities 5% s Quick Facts: 17% of High-End Entertainment Households report using their DVD drive on their PC to watch movies. 55% of these same consumers say that they don t watch Internet video because they don t want to be constrained to the PC. 30% of these same consumers say they don t want an Internet audio networking solution because they don t currently listen to online music content.
7 The Value Proposition for Consumer Electronics Discerning a Two-Pronged Need for Home Networking High Need Consumer Factors (Consumers will desire/need to connect IAs to other devices in the home; IA is far more useful to consumers if networked; etc. PDA Mobile Phone Screen Phone Portable MP3 Player Net PC Consumer NC Internet Radio Internet TV Two-Way Pager Game console MP3 Jukebox PVR Web Tablet Advanced Set-Top/Set-Top RG Functionality of Product High Need (Device has limited value without a connection to other devices (including a wireless network), requires firewall, etc.) Source: Networks in the Home: Analysis and Forecasts (Second Edition)
8 Finding a Role for the PC in an Entertainment Network Applications for the Home are different than the Home office. The home office is typically file sharing, Internet sharing, and printer sharing - very PC-centric. Home applications must be easy, resilient, and entertainment-centric. Finding a role for PC-centric networking in the home theater is certainly a hot topic in home networking and will be temporarily resolved through the development of adjunct devices such as media servers that can leverage the memory and processor power of a PC. - Debashis Pramanik, Product Line Manager, Home Networking, NETGEAR Inc. There is certainly a value chain in home video networking, and the industry is currently working to determine where the PC will find a place. However, when it comes to video entertainment, consumers hold no allegiances to the PC; instead, the demand is for any device that successfully transmits video. --Jim Meyer, Vice President of Marketing, Fantasma Networks There is a role for the PC or a PC-like device in an entertainment network. The current challenge for consumer electronic devices is the lack of horsepower or Central Processing Unit (CPU) needed to manage real-time audio/video streaming applications. For networking to make sense for consumer electronic devices, the industry will have to find a way to leverage the horsepower of the PC to support an entertainment network. -- Mark Bridgwater, Vice President and Evangelist, Integrated Entertainment Networks, Digital Harmony Technologies Networks in the Home: Analysis and Forecasts (Second Edition)
9 Questions about Evolving the Home Network PC and Entertainment Networks: Convergence Questions 1. Will the PC network evolve to deliver video and audio content on the preferred A/V device (television or stereo system)? 2. Will the entertainment network evolve to incorporate processor power, memory, and software applications and eliminate the need for a PC? 3. Will the convergence between the network environments require a behavioral change from consumers? Networks in the Home: Analysis and Forecasts (Second Edition)
10 Moving Beyond PCs: Where Do We See Early Spikes for Consumer Electronics and Home Networking? Network-Capable Set-Top Boxes Motorola Inc.: DCT 5000 (HomeRF) uniview Technologies Inc.: 310 VOD and 310 DVD (HomeRF) Pioneer Voyager 3000 (IEEE 1394) Lumenati Digital Entertainment Center (IEEE 1394) Scientific Atlanta Explorer 8000 (IEEE 1394) Philips Receiver for AOLTV Service (IEEE 1394) Sony PlusMedia Station (IEEE 1394) Network-Capable MP3 Players/Jukeboxes/Radios iobjects (Inari) SONICblue: Rio Digital Audio Receiver (Intellon and Broadcom) Simple Devices Inc.: SimpleFi and SimpleClock (HomeRF) Dell: Digital Audio Receiver (HomePNA) Gateway: Connected Music Player (HomePNA)
11 Forecast Model for Network-Capable Entertainment Products Set-Tops MP3 Jukebox Assumptions about Likely Entertainment Nodes Internet TV PVRs Web Tablet Forecasts for Likely Ent. Nodes Assumptions about Actual Ent. Networks Household Penetration Game Console Account for Overlap Total U.S. Households Nodes per Home Average Cost Per Node End-User Market Value Source: Networks in the Home: Analysis and Forecasts (Second Edition)
12 A TAM: Network-Capable CE Devices (Units in U.S. Households, in Millions) 100 Network Capable Set-Top Boxes, MP3 Jukeboxes, PVRs, Web Tablets, and Game Consoles in U.S. Households (Millions of Units) Units (#M)
13 Comparing Nodes: PCs and Entertainment 150 Growth in PC and Entertainment-Centric Network Nodes (U.S. Households) Network-Capable Entertainment Nodes (#M) 99 Total Network Nodes (#M) PC Network Nodes (#M) Source : Networks in the Home: Analysis and Forecasts (Second Edition)
14 Where Does Home Networking Go From Here? A Multimedia Roadmap 1394 solutions PC-centric and also the realm of high-end systems... PCs, with their processing power, remain central to home entertainment networking applications Growth spurred for home networking solutions in mainstream CE products, such as DVD players, DTVs, stereos, etc. except for certain products like game consoles and set-tops Set-tops and MP3 jukeboxes developed with networking technology Set-tops migrate to PVR functionality, higher processing speeds; home networking value proposition increases Converged Set-Tops with Voice, Video, and Audio? Web tablets used for multi-player gaming, video streaming applications Source: Networks in the Home: Analysis and Forecasts (Second Edition)
15 Structured Wiring Installations as a % of All New Homes 60% 40% 20% $491 19% $664 29% $822 38% $904 43% $953 46% $1,000 $750 $500 $250 End-User Market Value of Structured Wiring Market ($M) 0% Source : Home Builders and Networking Wiring, Parks Associates $0
16 Structured Wiring Drives Entertainment Applications Percent of New Homes Being Pre-Wired for Certain Applications (%) 60% 40% 20% 0% Average Percentage of New Homes Pre-Wired for Entertainment Applications (survey of 696 U.S. home builders) 25% 40% Multiroom Stereo Capability with In-Wall Speakers 21% 2001 BUILDER Magazine and Parks Associates, U.S. Builders and Emerging Technologies Average Among All U.S. Builders Average Among U.S. Builders Installing Structured Wiring 36% Direct-Broadcast Satellite TV 17% 29% Dedicated Home Theater 14% 26% Outdoor Speakers
17 RG Functionality Service-specific Multiple Services Set-Top RG Minimum software & hardware solution to support metering and measurement(s) Virtual RG 2 box solution: broadband modem connected to routing/networking hub Broadband or Narrowband Modem* Telemetry Gateway Multi-Service BB RG Broadband modem + voice and/or video + routing/networking hub Web-Centric BB RG 1 box solution: broadband modem + routing/networking hub Routing Device* Whole-House RG Centralized box enabling any service to any device from any access network *These devices are not included in gateway forecasts. Network-Specific Access Network Multiple/Flexible Networks
18 The Service Bundle in the Deployment Scheme To What Services are Networked Broadband Households Willing to Pay Additional Monthly Fees? Home Systems Control 53% Internet Telephony Basic Firewall Solutions Parental Control/Filtering Software Streaming Content Subscription to Music Content Sites 44% 43% 40% 39% 38% Source: Survey of 778 networked broadband households, 4Q % 20% 40% 60% Percent of Interested Networked Broadband Households (%)
19 How Parks Associates Envisions RG Deployment Phase I Strong Set-Top RG Rollout PC Network-Centric Virtual and Web-Centric Emphasis Thin Server Gateways Show Growth The Knee: Services Bundling Phase II Set-Top RG Rollout Continues Shift Away From Routers to Web-Centric RGs Structured Wiring Installs Grow Rapidly Move Toward Bundled Services?
20 Randy Glasbergen
21
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